Thursday Update

DB Live: Aegon; M&G; Tui; Watches of Switzerland

5.05pm: Swinney survives confidence vote

Education Secretary John Swinney has survived a no-confidence vote at Holyrood over the school results row.

Read more here

4.45pm: Markets dip on double whammy fears

The FTSE 100 took a step back as traders looked ahead to a double whammy of resurgent Brexit fears and an October end to the furlough. The index closed down 94.5 points (1.5%) at 6,185.62.

3pm: UKML rejects M&G’s revised offer

UK Mortgages has rejected a final offer by M&G Investment Management worth 70p per share, valuing the investment trust at £191m.

The new offer, which is 3p or 4.5% more than M&G’s previous approach, was lodged this morning (See below).

UKML said it continues to believe in the quality of the portfolio, the robustness of its Net Asset Value methodology and the quality of the investment management services provided by TwentyFour Asset Management.

“The board believes that the terms of the final possible offer continue to undervalue the company and its prospects”, it said.

This valuation is not recommendable to shareholders, it added, and therefore ‘sees no basis for engagement on this Final Possible Offer’.

UKML has said already that it will instigate a review of its business once the bid period ends to enhance liquidity and narrow the discount of the shares to NAV.

11am: Bus fares cut

National Express said it will use £4m from the government’s Job Retention Bonus scheme to cut fares on its Dundee and West Midlands bus routes.

It said the move, which will not affect coaches fares, would help boost demand and support the local economies.

The bonus scheme will pay firms £1,000 for each employee brought back from furlough and employed until January.

7.20am: EIE goes virtual – and bigger

EIE20, the technology investor showcase, is going virtual on Wednesday 14 October and will be expanded.

Full story here 

7am: Aegon cost cuts help earnings growth

Aegon office at Gyle Edinburgh

Pensions and savings group Aegon said earnings grew 17% in the first half, reflecting an 11% cut in the cost base and growing contribution from platform business.

Assets recovered following the stock market sell off and ended the half at £174bn –  including £143bn of platform assets. There were net deposits of £1.8bn into the business. 

Chief executive Mike Holliday-Williams, said: “We have a resilient business that has performed well in challenging markets.”

He said the changes brought about by coronavirus had seen the company digitise processes that would have previously required advisers to send in a paper form.

“Despite the challenges of the coronavirus we’ve continued to invest in the business,” he said. “We’ll continue to invest in the second half of the year, with a number of additional proposition enhancements planned.”

Tui plunges to deep loss

Holiday operator Tui said bookings for Summer 2020 are down 81% and capacity for Winter 2020/21 has been reduced by 40%. The company reported a Q3 group underlying EBIT loss of €1.1bn and €2bn over the nine months to the end of June.

Summer 2021 capacity has been “cautiously adjusted” by 20%, “with flexibility to adjust as we gain more visibility”, it said.

Bookings are currently up significantly as customers both rebook holidays from this Summer and look to secure new holidays early. Bookings for Summer 2021 are consequently up 145%.

Earlier this week the company reached an agreement with the German Federal Government for an additional stablisation package for €1.2bn.

Fifty-five hotels reopened in the quarter (15% of total portfolio) as lockdown restrictions eased worldwide from mid-May and there were encouraging signs of customer demand with average occupancy of 23% achieved, reflecting the initial restart of operations in Europe, Mexico, the Caribbean and Egypt and the necessary social distancing protocols in place.

All three Cruise operations remained suspended throughout the quarter, adhering to both German and UK government advice on cruising.

Watches of Switzerland

The jewellery chain’s Glasgow-born CEO Brian Duffy, said the company delivered a strong performance during the first 46 weeks of the year before adapting with “speed and agility” to the challenges presented by the COVID-19 pandemic. 

“Momentum accelerated in our US business adding to the positive performance in the UK and we remain confident in our strategy to drive profitable growth in both markets,” he said, adding that he was pleased with progress in the company’s first year since going public.

“Our encouraging Q1 sales performance underpins the strength of our supply-driven business model and provides the basis on which we provide FY21 guidance.”

Adjusted EBITDA for the year to 26 April increased 13.6% to £78.1 million, at the top end of revised guidance.

Post-period the company opened a dedicated Rolex store in Glasgow. It will be bringing Omega, Breitling and Tag Heuer to the new St James shopping mall in Edinburgh while a Goldsmiths adds to the portfolio at Fort Kinnaird.

M&GIM raises offer for UKML

M&G Investment Management (MAGIM) on behalf of one of its managed funds, M&G Specialty Finance Fund, has announced a revised and final possible all-cash offer for UKML.

It said the UKML board “continues to refuse to engage with MAGIM”.  In a final attempt to try and engage with the board before 17 August, MAGIM has posted an improved indicative offer announced on 20 July by 3p or 4.5% to 70p per share.

This values the existing issued share capital of UKML at approximately £191 million and represents a 26% premium prior to the earlier offer.

National Express loss

Bus operator National Express swung to a half year loss after the coronavirus lockdown led to an 80% slump in passenger traffic.

The company, which operates bus services in Europe and the US, reported a pre-tax loss of £122.2m from a profit of £88.4m a year earlier as revenue fell 22.7% to £1.03bn. Core earnings slumped to £88.3m from £243m in 2019.


Wall Street stocks closed higher on Wednesday, as the S&P 500 rebounded from its first losing session in over a week.

The Dow Jones Industrial Average was up 1.05%, the S&P 500 added 1.4%, and the Nasdaq Composite was 2.13% firmer.

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